Andy Lykens

Innovating and operating through growth

operations

Emergencies and habits

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Spending time at the dentist isn’t a fun past-time; you don’t go if you don’t have to and if you could avoid it, you would. But when your tooth hurts, the only thing on your mind is how soon you can get to your dentist’s office. Luckily, most of us have learned that habitual attention can help us avoid emergencies.

If people aren’t paying attention to you, it isn’t because you’re not important — it’s because you’re not important to them right now. Hopefully you’ve done the hard work of helping them instill good habits when you’re not top of mind.

The death of big growth

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An oak tree doesn’t promise how tall it’s going to be when it’s a seed. It doesn’t predict the number of branches it will have or how many leaves it will lose in autumn. It doesn’t promise the squirrels any certain quantity of acorns. It just grows. And while early on, the growth is very visible, no one expects a tree to keep growing until it’s as tall as a mountain. At some point a tree’s growth becomes invisible and simply regenerative. Then the growth stops.

As with all cycles, we’re coming around to a new period – one more affected each day by inflation, war, and possibly recession.

For at least as long as I’ve been working professionally, big growth companies (like tech giants) have enjoyed cheap debt and consumers whose idea of scarcity is waiting the full two years to buy the next iPhone.

The companies that middled (or worse) during this time are likely to be toast in the next year or 2. Their funds will dry up quickly and investors will turn their sights to something less shiny, more predictable, and ultimately familiar.

Companies that grew quickly will try to get that magic back because big growth is all they know. But if they’re not in a commodities business that can make a cheap offering to cost-conscious consumers, or find ways to normalize their operations, or choose projects to ignore while they focus on shoring up fundamentals, they will continue to have to make sacrifices to protect their margins and please their shareholders.

We can learn from the big growth folks who used to do pretty much anything that even looked like growth – hiring for hiring’s sake or spinning up new projects, spending money because money was cheap and seemingly endless.

Yes, there is still capital, and investors will need to deploy that capital, but they may be more hesitant. They’ll be looking more closely at the relationships and business models to vet opportunities with a new, more pragmatic lens.

This is good news if you’re pragmatic and thorough, if you’re thoughtful and patient; now is your time to shine. But don’t expect big growth. Those rules have changed.

Start small. Deliver exceptional products and services. Get a couple of people so excited about your work that they ask you solve more of their problems. Then figure out how to streamline those operations. Yes, seek growth, but not by ‘big growth’s’ rules.

This still works, it’s only in the necessity of big growth that big spending is required. Big growth incentivizes managers to ‘grow’ – not to build great businesses.

If you work very hard, and if you’re lucky, you may hit a regenerative phase. Just don’t start promising the squirrels how many acorns you’re going to produce.

Do the legwork.

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Understanding how something works is complicated. Imagine someone gives you a car engine…ok, they give you a car engine and also take away your cell phone. Then they put you in a garage and tell you that the engine runs, but it doesn’t run as well as it should. You can tell when the engine is running correctly because you’re given a device that measures the number of times the engine’s pistons cycle in a minute (I don’t know if such a device exists, but humor me). You are incentivized to fix this engine with a significant reward (like ice cream).

You have all the tools you need, an instruction manual for the engine, and…ok fine, a cell phone, but one that only connects to an intranet with information on the engine and allows you to call some mechanics for advice. I repeat, the cell phone does not allow you to access the social medias.

After about 30 minutes of trying to login into Twitter and realizing its futile, you decide to get to work.

Given this task, most people who don’t have familiarity with an engine would probably spend some time on the phone with a mechanic. They’d peruse the engine schematics and instructions, and they’d probably also practice using the measuring device. There would also be other things to try like watching the engine run for a while. This is likely to occur in a different order depending on the person.

At some point they will have gathered enough information to make a decision about where to start. Should they take apart the whole engine? Focus on tweaking some part of the engine involved in the cycle time? Maybe they’ll just smack it with a wrench to see if that works? Where they start doesn’t really matter. The key is they have enough information to make a decision about where to start, they are unlikely to make a correct fix on their first try, and so they’ll need to measure the result and then decide what to do next.

Organizations are essentially engines within engines. The components work together in a specific way and you can adjust them and tweak them to try and change the result derived from the current arrangement of components. Similarly, you’re unlikely to nail it on your first try and the opportunity for perfection does not exist.

So then a question: if you have the tools, an expert resource, a manual, a way to measure your outcomes, and the ability to adjust your process after measuring, when is it appropriate to rely solely on your intuition?